SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
February 28, 1994
PENTAIR, INC.
(Exact name of Registrant as specified in its Charter)
MINNESOTA 0-4689 41-0907434
(State or other (Commission (IRS Employer
Jurisdiction of File Number) Identification
Incorporation) Number)
1500 County Road B2 West Suite 400
St. Paul, Minnesota 55113
(Address of Principal Executive Offices) (Zip Code)
612-636-7920
(Registrant's Telephone Number, Including Area Code)
Not applicable
(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On February 28, 1994, the Registrant completed the purchase
from Fried. Krupp Hoesch-Krupp of all of the net assets and
business of the Schroff Group (Schroff), including the stock of
its international subsidiaries, for $154 million paid in cash at
closing, which includes $1.7 million in interest accrued from
January 1, 1994, the economic transfer date.
The operating assets of the Schroff manufacturing facilities in
Germany were acquired by a new indirect German subsidiary
of the Registrant, Schroff GmbH, subject to normal payables
and accruals of the business. These assets were used by
Schroff in the manufacture of cabinets, cases, subracks and
accessories for the electronics industry. Schroff GmbH is
continuing its predecessor's business and will use the assets in
the same manner as before.
The outstanding stock of all of the European subsidiaries of
Schroff was acquired by a new wholly-owned subsidiary of the
Registrant, EuroPentair GmbH, which also owns the stock of
the new Schroff GmbH. The outstanding stock of the
non-European subsidiaries of Schroff, which included its U.S.
subsidiary Schroff, Inc., was acquired by FC Holdings Inc., a
wholly-owned subsidiary of the Registrant.
Funds for payment of the cash purchase price were provided
through the Registrant's revolving credit facilities described in
Item 5 of this report.
Item 5. Other Events.
Effective as of February 11, 1994, Pentair entered into revolving
credit facilities with a group of six banks, Continental Bank N.A.,
Morgan Guaranty Trust Company of New York, J.P. Morgan
Delaware, First Bank National Association, Norwest Bank
Minnesota, N.A. and NBD Bank, N.A. Two parallel facility
agreements provide for aggregate credit lines of $170 million
divided among two bank groups. Pentair's outstanding Bid
Loan Agreement with certain of these banks was amended in
a related transaction. The facility agreements provide for
revolving credits for a three-year period, unless extended, at the
expiration of which period the outstanding loans are converted
into a term loan having a four-year repayment period. The
credit facilities are unsecured and include certain financial and
other covenants on the part of Pentair.
In addition, Pentair and its new subsidiary formed in connection
with the Schroff acquisition (see Item 2 above), EuroPentair
GmbH, entered into a 115 million Deutschmark (approximately
US $65 million) facility agreement with Morgan Guaranty Trust
Company of New York, Continental Bank N.A., NBD Bank N.A.,
and Dresdner Bank. This facility is similar to the two other
domestic credit agreements, but provides for borrowings and
repayments in German marks or certain other European
currencies. This facility also provides for unsecured revolving
loans for a three-year period with a similar term loan conversion
and four-year repayment period. Substantially all of the
available credit under this agreement was borrowed at the
closing of the Schroff acquisition.
The three revolving credit facilities discussed above replace
previous credit agreements between Pentair and these banks
for revolving credit in the aggregate amount of $250 million.
Item 7. Financial Statements and Exhibits.
The information supplied under this item is supplemented by
the following:
a.Financial Statements of Business Acquired (Schroff GmbH):
The audited financial statements for the fiscal year ended
December 31, 1993 of the acquired business required under
this item have been prepared by the auditor of Schroff's parent
company, Fried. Krupp AG Hoesch-Krupp. The financial
statements were prepared in the German language in
accordance with GOB (generally accepted accounting principles
in Germany); the Registrant has not been able to complete the
translation of the financial statements and the adjustments
required to conform presentation thereof to Regulation S-X.
The financial statements will be filed as soon as reasonably
practicable, but no later than 60 days from the date hereof.
b.Pro Forma Financial Information:
The pro forma financial information required under this item can
not be prepared until the requisite audited financial statements
required under item (a) above have been translated and
conformed. The pro forma financial information will be filed as
soon as reasonably practicable, but no later than 60 days from
the date hereof.
c.Exhibits:
(2.1)Asset Purchase Agreement among EuroPentair Gmbh,
Pentair Deutschland Gmbh, F.C. Holdings, Inc. USA, and
Schroff Gmbh dated December 22, 1993 (without Exhibits). The
Registrant agrees to provide a copy of such Exhibits to the
Commission upon request.
(2.2)Agreement between Pentair, Inc. and Fried. AG Krupp
Hoesch-Krupp dated December 22, 1993
(2.3)Non-Competition Agreement dated December 22, 1993
(2.4)Letter of Guarantee to Seller by Pentair, Inc. of Buyer's
obligations under Asset Purchase Agreement
(2.5)Letter of Guarantee to Buyer by Fried. Krupp AG Hoesch-
Krupp of Seller's obligations under Asset Purchase Agreement
(4.1)$125,000,000 Facility Agreement dated as of February 11,
1994 between Pentair, Inc., Continental Bank N.A. for itself and
as Agent, Morgan Guaranty Trust Company of New York for
itself and as Agent, NBD Bank, N.A., and J. P. Morgan
Delaware.
(4.2)$45,000,000 Facility Agreement dated as of February 11,
1994 between Pentair, Inc., First Bank National Association, for
itself and as Agent, and Norwest Bank Minnesota N.A.
(4.3) Second Amendment to Bid Loan Agreement dated as of
February11, 1994 between Pentair, Inc., Continental Bank N.A.
for itself and as Agent, Morgan Guaranty Trust Company of
New York, J. P. Morgan Delaware, First Bank National
Association, Norwest Bank Minnesota, N.A., and NBD Bank,
N.A.
(4.4)DM 115,000,000 Facility Agreement dated as of February
11, 1994 between EuroPentair, GmbH as Borrower, Pentair,
Inc., as Guarantor, Morgan Guaranty Trust Company of New
York for itself and as Agent, Continental Bank N.A., for itself
and as Agent, NBD Bank, N.A. and Dresdner Bank.
(99)Press release, dated February 28, 1994, concerning
completion of acquisition of Schroff GmbH.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
PENTAIR, INC
By: Joseph R. Collins
Senior Vice President,
Chief Financial Officer
Dated: March 14, 1994
EXHIBIT INDEX
(2.1)Asset Purchase Agreement among EuroPentair Gmbh,
Pentair Deutschland Gmbh, F.C. Holdings, Inc. USA, and
Schroff Gmbh dated December 22, 1993 (without Exhibits). The
Registrant agrees to provide a copy of such Exhibits to the
Commission upon request. (Incorporated by reference to
Exhibit 2.1 to the Company's Current Report on Form 8-K filed
January 4, 1994)
(2.2)Agreement between Pentair, Inc. and Fried. AG Krupp
Hoesch-Krupp dated December 22, 1993 (Incorporated by
reference to Exhibit 2.2 to the Company's Current Report on
Form 8-K filed January 4, 1994)
(2.3)Non-Competition Agreement dated December 22, 1993
(Incorporated by reference to Exhibit 2.3 to the Company's
Current Report on Form 8-K filed January 4, 1994)
(2.4)Letter of Guarantee to Seller by Pentair, Inc. of Buyer's
obligations under Asset Purchase Agreement (Incorporated by
reference to Exhibit 2.4 to the Company's Current Report on
Form 8-K filed January 4, 1994)
(2.5)Letter of Guarantee to Buyer by Fried. Krupp AG Hoesch-
Krupp of Seller's obligations under Asset Purchase Agreement
(Incorporated by reference to Exhibit 2.5 to the Company's
Current Report on Form 8-K filed January 4, 1994)
(4.1)$125,000,000 Facility Agreement dated as of February 11,
1994 between Pentair, Inc., Continental Bank N.A. for itself and
as Agent, Morgan Guaranty Trust Company of New York for
itself and as Agent, NBD Bank, N.A., and J. P. Morgan
Delaware.(P)
(4.2)$45,000,000 Facility Agreement dated as of February11,
1994 between Pentair, Inc., First Bank National Association, for
itself and as Agent, and Norwest Bank Minnesota N.A.(P)
(4.3) Second Amendment to Bid Loan Agreement dated as of
February11, 1994 between Pentair, Inc., Continental Bank N.A.
for itself and as Agent, Morgan Guaranty Trust Company of
New York, J. P. Morgan Delaware, First Bank National
Association, Norwest Bank Minnesota, N.A., and NBD Bank,
N.A.
(4.4)DM 115,000,000 Facility Agreement dated as of February
11, 1994 between EuroPentair, GmbH as Borrower, Pentair,
Inc., as Guarantor, Morgan Guaranty Trust Company of New
York for itself and as Agent, Continental Bank N.A., for itself
and as Agent, NBD Bank, N.A. and Dresdner Bank.
(99)Press release, dated February 28, 1994, concerning
completion of acquisition of Schroff GmbH.
EXHIBIT 4.3
SECOND AMENDMENT TO BID LOAN AGREEMENT
THIS SECOND AMENDMENT to Bid Loan Agreement ("Second
Amendment"), dated as of February 11, 1994, is entered into
among Pentair, Inc., Continental Bank N.A., for itself and as
Agent, Morgan Guaranty Trust Company of New York, J.P.
Morgan Delaware, First Bank National Association, Norwest
Bank Minnesota, N.A., and NBD Bank, N.A.
WHEREAS, Mellon Bank, N.A. and the parties other than NBD
Bank, N.A. entered into a Bid Loan Agreement dated as of
December 14, 1988 (as amended, the "Agreement"); and
WHEREAS, by the First Amendment to the Bid Loan Agreement
dated as of January 1, 1991, Mellon Bank, N.A. withdrew as a
party to the Agreement and NBD Bank, N.A. was added as a
party thereto;
NOW, THEREFORE, the parties agree as follows:
Definitions Amended. Section 1.01 of the Agreement is
amended by amending the definitions of the following terms to
read as follows:
"Facility Agreements" means the Facility Agreement dated
as of February 11, 1994 between the Borrower and Continental
Bank N.A. and Morgan Guaranty Trust Company of New York,
as Agents, and the other lenders named therein, and the
Facility Agreement dated as of February 11, 1994 between the
Borrower and First Bank National Association, as Agent, and
the other lenders named therein, as each may be amended
from time to time.
"Notes" means the Bid Loan Notes of the Borrower in the
form of amended Exhibit A to this Second Amendment.
"Termination Date" means January 1, 1997 (or if such date
is not a Business Day, the next succeeding day which is a
Business Day), or such later date corresponding to a Revolving
Credit Termination Date under the Facility Agreements, as the
same may be extended pursuant to Section 2.01(c) of the
Facility Agreements.
Section 3.01(c) Amended. Section 3.01(c) of the
Agreement is amended to read in its entirety as follows:
"(c) the fact that, as of the time immediately after the making of
such Bid Loan, the aggregate outstanding principal amount of
Bid Loans and Loans under all Facility Agreements shall not
exceed the aggregate Total Commitments under all Facility
Agreements."
Section 8.01 Amended. Section 8.01 of the Agreement is
hereby amended by adding, at the end thereof, the expression
";provided that notices to the Agent under Article II shall not be
effective until received".
Section 8.03 Amended. Section 8.03 of the Agreement is
amended by adding, following the word "hereof" on the sixth
line thereof, the expression "or any Default or alleged Default by
the Borrower hereunder".
Representations and Warranties. The Borrower represents
and warrants that the representations and warranties made in
Article IV of the Agreement are true as of the date of this
Second Amendment and that no Default under the Agreement
has occurred and is continuing.
Conditions to Effectiveness of Second Amendment. This
Second Amendment shall become effective only upon
satisfaction of the following conditions:
(a) Receipt by each Bank for the account of
such Bank of a duly executed Note in the form of Amended
Exhibit A;
(b) Receipt by each Bank of an opinion of counsel for
the Borrower, substantially in the form of Amended Exhibit E;
and
(c) Receipt by each Bank of a certificate signed by an
officer of the Borrower certifying the resolutions of the Borrower
authorizing the execution, delivery and performance of this
Second Amendment and the Notes.
Continued Validity; Counterparts. Except as amended by
this Second Amendment, the Agreement as amended by the
First Amendment remains in full force and effect. This Second
Amendment may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
This Second Amendment shall become effective when the
Agent shall have received counterparts hereof signed by all of
the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused
this Second Amendment to Bid Loan Agreement to be duly
executed by their respective authorized officers as of the day
and year first above written.
PENTAIR, INC.
By: Joseph R. Collins
Title: Chief Financial Officer
Water's Edge Plaza
1500 County Road B2 West
St. Paul, Minnesota 55113
Attention: Chief Financial Officer
Telecopy: (612) 639-5251
Telephone: (612) 636-7920
CONTINENTAL BANK N.A.,
for itself and as Agent
By Barry Watters
Title: Vice President
231 South LaSalle Street
Chicago, Illinois 60697
Attn: Barry Watters
Telephone: (312) 828-6307
Telecopy: (312) 987-1276
Person to whom Bid Loan corres-
pondence should be addressed:
Jessica Greenfield
231 South LaSalle Street
Chicago, Illinois 60697
Telephone: (312) 828-6145
Telecopy: (312) 974-9102
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, for itself and
as Agent
By William Stevenson
Title: Vice President
60 Wall Street
New York, New York 10260
Attn: William J. Stevenson
Telephone: (212) 648-6839
Telecopy: (212) 648-5336
J. P. MORGAN DELAWARE
By: David J. Morris
Title: Vice President
902 Market Street
Wilmington, Delaware 19801
Attn: David J. Morris
Telephone: (302) 651-3788
Telecopy: (302) 654-5336
FIRST BANK NATIONAL ASSOCIATION
By: Deborah O. Hall
Title: Vice President
First Bank Place 601 Second Ave. South
Minneapolis, Minnesota 55402-4302
Attn: Deborah O. Hall
Telecopy: (612) 973-0824
Telephone: (612) 973-0543
NORWEST BANK MINNESOTA, N.A.
By: Gloria J. Charley
Title: Corporate Banking Officer
Norwest Center
6th & Marquette
Minneapolis, Minnesota 55479-0085
Attn: National Division
Gloria J. Charley
Telex Number: 290734
Answerback: NORWEST BK MPS
Telephone: (612) 667-3503
Telecopy: (612) 667-8219
NBD BANK, N.A.
By: Patrick Skiles
Title: Vice President
611 Woodward Avenue
Detroit, Michigan 48226
Attn: Patrick P. Skiles
Telephone: (313) 225-1798
Telecopy: (313) 225-1671
AMENDED EXHIBIT A
BID LOAN NOTE
Minneapolis, Minnesota
$170,000,000 February 11, 1994
For value received, PENTAIR, INC., a Minnesota
corporation (the "Borrower"), promises to pay to the order of
(the "Bank") the principal sum of One Hundred Seventy Million
Dollars ($170,000,000) or, if less, the aggregate unpaid principal
amount of all Bid Loans made by the Bank to the Borrower
pursuant to the Bid Loan Agreement referred to below, together
with interest on the unpaid principal amount thereof at the rates
and on the dates set forth in the Bid Loan Agreement. The
Borrower shall pay each Bid Loan in full on the earlier of (i) the
last day of its Interest Period, and (ii) the Termination Date.
All payments of principal and interest shall be made in
lawful money of the United States in federal or other
immediately available funds at the office of Continental Bank
N.A., 231 South LaSalle Street, Chicago, Illinois, 60697.
All Bid Loans made by the Bank to the Borrower pursuant
to the Bid Loan Agreement and all payments of the principal
thereof may be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto,
or on a continuation of such schedule attached to and made a
part hereof.
This Note is one of the Notes referred to in the Bid Loan
Agreement dated December 14, 1988, as amended January 1,
1991 and February 11, 1994, among the Borrower, the banks
listed on the signature pages thereof and Continental Bank
N.A., as Agent. Reference is made to such Bid Loan
Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof.
PENTAIR, INC.
By
Title:
LOANS AND PAYMENTS OF PRINCIPAL
Type Amount of
Amount of Principal Maturity Notation
Date of Loan Loan Repaid Date Made By
OPINION OF COUNSEL FOR THE BORROWER
To the Banks and the Agent
Referred to Below
c/o Continental Bank N.A.,
as Agent
231 South LaSalle Street
Chicago, Illinois 60697
Gentlemen:
We have acted as counsel for Pentair, Inc. (the "Borrower")
in connection with the Second Amendment dated February 11,
1994 ("Second Amendment") to the Bid Loan Agreement (the
"Bid Loan Agreement") dated December 14, 1988 as amended
January 1, 1991 among the Borrower, Continental Bank N.A.,
for itself and as Agent, Morgan Guaranty Trust Company of
New York, Morgan Bank (Delaware), First Bank National
Association, Norwest Bank Minnesota, N.A., and NBD Bank,
N.A. Terms defined in the Bid Loan Agreement are used herein
as therein defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation validly existing and in
good standing under the laws of Minnesota and has all
corporate power and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business as now conducted.
2. The execution, delivery and performance by the
Borrower of the Second Amendment and the Notes are within
the Borrower's corporate powers, have been duly authorized by
all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the certificate of
incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding
upon the Borrower.
3. The Second Amendment constitutes a valid and
binding agreement of the Borrower and the Notes constitute
valid and binding obligations of the Borrower, enforceable in
accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy,
moratorium, insolvency or other laws of general application
relating to the enforcement of creditors' rights, and by general
principles of equity, and by Minnesota statutes to the extent
compliance is required by other than the Borrower.
Very truly yours,
EXHIBIT 4.4
DM 115,000,000
DEUTSCHMARK
FACILITY AGREEMENT
among
EuroPentair GmbH,
Borrower,
PENTAIR, INC.,
Guarantor,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
for itself and as Agent,
CONTINENTAL BANK N.A.,
for itself and as Agent,
NBD BANK, N.A.
and
DRESDNER BANK
Dated as of February 11, 1994
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS
Section 1.01. Definitions
Section 1.02. Accounting Terms and Determinations
ARTICLE II - THE CREDITS
Section 2.01. Commitments to Lend
Section 2.02. Maturity
Section 2.03. Method of Borrowing
Section 2.04. Loans in an Alternative Currency
Section 2.05. Notes
Section 2.06. Interest Rate and Payment
Section 2.07. Facility Fees
Section 2.08 Duration of Interest Periods
Section 2.09. Termination or Reduction of
Commitments
Section 2.10. Required Repayments
Section 2.11. No Optional Prepayments
Section 2.12. General Provisions as to Payments
Section 2.13. Funding Losses
Section 2.14. Computation of Interest and Fees
Section 2.15. Lending Unlawful
Section 2.16. Funds Unavailable
Section 2.17. Increased Costs and Reduced Returns
Section 2.18. Pro Rata Sharing
Section 2.19. INTENTIONALLY OMITTED
Section 2.20. Judgment Currency
Section 2.21. Taxes and Costs
ARTICLE III - CONDITIONS TO BORROWINGS
Section 3.01. All Borrowings
Section 3.02. First Borrowing
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
Section 4.01. Corporate Existence and Power
Section 4.02. Corporate and Governmental
Authorization; Contravention
Section 4.03. Binding Effect
Section 4.04. Financial Information
Section 4.05. Litigation
Section 4.06. Compliance with ERISA
Section 4.07. Taxes
Section 4.08. Subsidiaries
Section 4.09. Not an Investment Company
ARTICLE V - COVENANTS
Section 5.01. Information
Section 5.02. Current Assets
Section 5.03. Leverage Ratio
Section 5.04. Minimum Consolidated Tangible Net
Worth
Section 5.05. Expense Ratio
Section 5.06. Subsidiary Debt
Section 5.07. Negative Pledge
Section 5.08. Consolidations, Mergers and
Sales of Assets
Section 5.09. Acquisitions
Section 5.10. Use of Proceeds
ARTICLE VI - DEFAULTS
Section 6.01. Events of Default
Section 6.02. Notice of Default
ARTICLE VII - THE AGENT
Section 7.01. Appointment and Authorization
Section 7.02. Agent and Affiliates
Section 7.03. Action by Agent
Section 7.04. Consultation with Experts
Section 7.05. Liability of Agent
Section 7.06. Indemnification
Section 7.07. Agent's Fees
Section 7.08. Bank Credit Decision
Section 7.09. Successor Agent
ARTICLE VIII - MISCELLANEOUS
Section 8.01. Notices
Section 8.02. No Waivers
Section 8.03. Expenses; Documentary Taxes
Section 8.04. Amendments and Waivers
Section 8.05. Collateral
Section 8.06. Successors and Assigns
Section 8.07. Minnesota Law
Section 8.08. Counterparts; Effectiveness
Section 8.09. Highly Leveraged Transaction Classi-
fication
ARTICLE IX - GUARANTY
Section 9.01. Guaranty
Section 9.02. Guaranty Unconditional
Section 9.03. Discharge Only Upon Payment in Full;
Reinstatement in Certain
Circumstances
Section 9.04. Waiver by the Guarantor
Section 9.05. Subrogation
Section 9.06. Stay of Acceleration
Signatures
Exhibit A - Note
Exhibit B - Opinion of Counsel For the Borrower
DEUTSCHMARK
FACILITY AGREEMENT
Agreement dated as of February 11, 1994, among
EuroPentair GmbH, PENTAIR, INC., MORGAN GUARANTY
TRUST COMPANY OF NEW YORK and CONTINENTAL BANK
N.A., for themselves and as agents, NBD BANK, N.A. and
DRESDNER BANK AG.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. The following terms, as used
herein, have the following meanings:
"Agent" means either Morgan Guaranty Trust Company of
New York or Continental Bank N.A. in their capacity as agents
for the Banks hereunder; "Agents" means both of such
institutions. Morgan Guaranty Trust Company of New York
shall be the "Managing Agent" and if the word "Agent" is used
in the singular, it shall refer to the Managing Agent, unless the
context otherwise requires.
"Agreement" means the Deutschmark Facility Agreement
dated as of February 11, 1994, among EuroPentair GmbH,
Pentair, Inc., Morgan Guaranty Trust Company of New York,
Continental Bank N.A., for themselves and as Agents, NBD
Bank, N.A. and Dresdner Bank AG.
"Alternative Currency" means French Francs or British
Pounds Sterling.
"Banks" means Morgan Guaranty Trust Company of New
York, Continental Bank N.A., NBD Bank, N.A. and Dresdner
Bank AG, and their successors and assigns.
"Borrower" means EuroPentair GmbH, a German limited
liability company, and its successors.
"Borrowing" means a borrowing hereunder consisting of
Loans made to the Borrower at the same time by all Banks
severally.
"Business Day" means any business day (except a
Saturday, Sunday or other day on which commercial banks in
New York City or Frankfurt are authorized by law to close) on
which commercial banks are open for international business
(including dealings in Deutschmark deposits) in London, and,
where funds are to be paid or made available in an Alternative
Currency, on which commercial banks are open for domestic
and international business (including dealings in deposits in
such Alternative Currency) in both London and the place where
such funds are paid or made available.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commitment" means at any date, with respect to each
Bank, the amount set forth below opposite such Bank's name,
as such amount may be reduced from time to time pursuant to
Section 2.09, or increased from time to time pursuant to
Section 2.01(c)(iii).
Morgan Guaranty Trust
Company of New York DM 40,000,000
Continental Bank N.A. DM 40,000,000
NBD Bank, N.A. DM 17,500,000
Dresdner Bank DM 17,500,000
Total Commitments = DM 115,000,000
"Commitment Termination Date" means January 1, 2001 (or
if such date is not a Business Day, the next succeeding day
which is a Business Day), as the same may be extended
pursuant to Section 2.01(c).
"Consolidated Cumulative Net Income" means the total net
income of the Guarantor and its Consolidated Subsidiaries
earned or received after December 31, 1993.
"Consolidated Current Assets" means at any date the
consolidated current assets of the Guarantor and its
Consolidated Subsidiaries determined as of such date.
"Consolidated Current Liabilities" means at any date (i) the
consolidated current liabilities of the Guarantor and its
Consolidated Subsidiaries plus (ii) the current liabilities of any
Person (other than the Guarantor or a Consolidated Subsidiary)
which are Guaranteed by the Guarantor or a Consolidated
Subsidiary.
"Consolidated Debt" means at any date the Debt of the
Guarantor and its Consolidated Subsidiaries, determined on a
consolidated basis as of such date.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Guarantor in its consolidated
financial statements as of such date.
"Consolidated Tangible Net Worth" means at any date (1)
the consolidated stockholders' equity of the Guarantor and its
Consolidated Subsidiaries (including without duplication, the
investment of Pentair Duluth Corp. in LSPI and of Pentair Duluth
Pulp Corp. in LSPI Fiber), plus (2) the cumulative effect of the
accounting change of $36.9 million applicable to the adoption
by the Guarantor effective January 1, 1992 of Financial
Accounting Standard No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" and less (3) the
amount of the consolidated Intangible Assets in excess of 15%
of the consolidated assets of the Guarantor and its
Consolidated Subsidiaries, all determined as of such date. For
purposes of this definition "Intangible Assets" means the
amount (to the extent reflected in determining such
consolidated stockholders' equity) of (i) all write-ups (other than
write-ups resulting from foreign currency translations and
write-ups of assets of a going concern business made within
twelve months after the acquisition of such business)
subsequent to December 31, 1993 in the book value of any
asset owned by the Guarantor or any Consolidated Subsidiary,
(ii) all investments in unconsolidated Subsidiaries and (iii) all
unamortized debt discount and expense, unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade
names, copyrights, organizational or developmental expenses
and other intangible items. Notwithstanding the previous
sentence, for this purpose Intangible Assets does not include
the investment of Pentair Duluth Corp. in LSPI or of Pentair
Duluth Pulp Corp. in LSPI Fiber or the ownership of the
Guarantor or any Consolidated Subsidiary in any other joint
venture or entity that is not a Subsidiary.
"Controlled Group" means all members of a controlled
group of corporations and all trades or businesses (whether or
not incorporated) under common control which, together with
the Guarantor, are treated as a single employer under Sections
414(b) or 414(c) of the Code.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price
of property or services, except trade accounts payable arising
in the ordinary course of business, (iv) all obligations of such
Person as lessee under capital leases, (v) all Debt of others
secured by a Lien on any asset of such Person, whether or not
such Debt is assumed by such Person, (vi) the amount of any
proceeds of a Sale of Receivables less amounts collected on
the receivables sold in such Sale of Receivables and (vii)
subject to the limitations of the following portion of this
definition, all Debt (which will include only for the purpose of
this clause (vii) operating leases of any Person other than a
Subsidiary) of others Guaranteed by such Person.
Notwithstanding the foregoing, Debt of the Guarantor and its
Consolidated Subsidiaries shall be modified as follows:
(a) Debt does not include any obligations of
LSPI, the Guarantor or Pentair Duluth Corp. with respect to the
LSPI 1987 Lease under any instruments, including the Cash
Deficiency Agreements and Keepwell Agreement.
(b) With respect to any project financing, through loans,
equipment leases or other incurrence of indebtedness, of
expansion by LSPI of its Duluth paper mill or by LSPI Fiber of
the SRFI recycled pulp mill or other investment related to the
pulp or paper industry, including sources of supply of raw
materials for pulp or paper, by LSPI, LSPI Fiber, SRFI or any
other joint venture or entity in which the Guarantor or any
Consolidated Subsidiary has an ownership interest, but which
is not a Subsidiary of the Guarantor or a Consolidated
Subsidiary, if an event or a series of events such as completion
of the project, commissioning, or refinancing of the project or
entity reduces the aggregate liability of the Guarantor or any
Consolidated Subsidiary for any lease payments or debt
obligations relating to the project in the form of credit support,
deficiency or guaranty amounts to 50% or less of the maximum
amount of the Guarantor's and any Consolidated Subsidiary's
portion of amounts financed plus amounts advanced by
Guarantor or such Consolidated Subsidiary, then the liability of
the Guarantor and such Consolidated Subsidiary for any lease
payments or debt obligations in the form of credit support,
deficiency or guaranty shall be included as Debt only to the
extent of the greater of (i) the Guarantor's or such Consolidated
Subsidiary's portion of such lease payments or debt obligations
due within the following 12-month period and (ii) 25% of the
Guarantor's or such Consolidated Subsidiary's maximum
cumulative future credit support, deficiency or guaranty related
to such project.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of
time or both would, unless cured or waived, become an Event
of Default.
"Deutschmarks" and the sign "DM" mean lawful money of
the Federal Republic of Germany.
"Deutschmark Amount" means in relation to any Borrowing
denominated in an Alternative Currency, the amount designated
by the Borrower as the Deutschmark amount of such Borrowing
in the related Notice of Borrowing. Each Borrowing
denominated in an Alternative Currency shall be deemed a
utilization of the Commitments in an amount equal to the
Deutschmark Amount thereof.
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Equivalent Amount" means on any date, the amount of
Alternative Currency converted from Deutschmarks at the
Agent's spot buying rate (based on the London interbank
market rate then prevailing) for Deutschmarks against such
Alternative Currency as of approximately 11:00 a.m. (London
time) three Business Days before such date.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, or any successor statute.
"Event of Default" has the meaning set forth in Section 6.01.
"Fixed Rate" has the meaning set forth in Section 2.06.
"Funded Debt" means at any date that portion of the Debt
of the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis as of such date, included only by
clauses (i) through (vi) of the definition of Debt.
"Guarantee" by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any Debt of any other Person or in any manner
providing for the payment of any Debt of any other Person or
otherwise protecting the holder of such Debt against loss
(whether by agreement to keep-well, to purchase assets,
goods, securities, services, or to take-or-pay or otherwise);
provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course
of business. The term "Guarantee" used as a verb has a
correlative meaning.
"Guarantor" means Pentair, Inc., a Minnesota corporation,
and its successors.
"Interbank Offered Rate" has the meaning set forth in
Section 2.06.
"Interest Period" means the period commencing on the date
of such Borrowing and ending one, two, three, or six months
thereafter, as the Borrower may elect in the applicable Notice
of Borrowing, provided that:
any Interest Period which would otherwise end on
a day which is not a Business Day shall be extended to the
next succeeding Business Day unless such Business Day falls
in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
any Interest Period which begins on the last Business Day
of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the
end of such Interest Period) shall, subject to clause (iii) below,
end on the last Business Day of a calendar month; and
if any Interest Period includes a date on which a payment
of principal of the Loans is required to be made but does not
end on such date, then (a) the principal amount (if any) of each
Loan required to be repaid on such date shall have an Interest
Period ending on such date and (b) the remainder (if any) of
each such Loan shall have an Interest Period determined as set
forth above.
"Lending Office" means, as to each Bank, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire
as its Lending Office) or such other office, branch or affiliate of
such Bank as it may hereafter designate as its Lending Office
by notice to the Borrower and the Agent.
"Leverage Ratio" means at any date the ratio of
Consolidated Debt to Consolidated Tangible Net Worth.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to
a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement
relating to such assets.
"Loan" means a Loan to be made by a Bank pursuant to
Section 2.01; unless otherwise provided in a notice pursuant to
Section 2.04, all Loans shall be made in Deutschmarks.
"LSPI" means Lake Superior Paper Industries, a Minnesota
joint venture between Minnesota Paper, Incorporated and
Pentair Duluth Corp.
"LSPI 1987 Lease" means the Sale and Leaseback of
LSPI's Supercalendered Paper Mill dated December 31, 1987
and the documents related thereto, as they may be amended
from time to time.
"LSPI Fiber" means LSPI Fiber Co., a Minnesota joint
venture between Minnesota Pulp Incorporated II and Pentair
Duluth Pulp Corp., a subsidiary of Duluth Holdings (Paper)
Corp., and an indirect subsidiary of Guarantor.
"Margin" has the meaning set forth in Section 2.06.
"Notes" means the promissory notes of the Borrower in the
form of Exhibit A.
"Notice of Borrowing" has the meaning set forth in Section
2.03.
"Participant" and "Participation" have the meanings set forth
in Section 8.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"Person" means an individual, a corporation, a partnership,
an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and is either
(i) maintained by the Borrower or any member of the Controlled
Group for employees of the Borrower or any member of the
Controlled Group or (ii) maintained pursuant to a collective
bargaining agreement or any other arrangement under which
more than one employer makes contributions and to which the
Borrower or any member of the Controlled Group is then
making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.
"Principal Repayment Dates" means the dates on which the
principal of the Loans is required to be repaid pursuant to
Section 2.10.
"Refinancing Loan" means a Loan with respect to which,
after giving effect to the Loan and the application of the
proceeds thereof, no increase results in the aggregate
outstanding principal amount of Loans made by any Bank.
"Regulatory Change" means, after the date hereof, the
adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof or compliance by any Bank with any
request or directive (whether or not having the force of law) of
any such authority, central bank or comparable agency.
"Required Banks" means at any time Banks having at least
66-2/3% of the aggregate amount of the Commitments or, if the
Commitments shall have been terminated, holding at least
66-2/3% of all Loans outstanding.
"Reserve Percentage" has the meaning set forth in Section
2.06.
"Revolving Credit Period" means the period from the date
hereof to and including January 1, 1997 (or if such day is not
a Business Day, the next succeeding day which is a Business
Day), as such Period may be extended in accordance with
Section 2.01(c).
"Revolving Credit Termination Date" means January 1,
1997, (or if such day is not a Business Day, the next
succeeding day which is a Business Day), as such Date may
be extended in accordance with Section 2.01(c).
"Sale of Receivables" means a sale by the Guarantor or a
Consolidated Subsidiary, with or without recourse or discount,
of an interest in trade receivables of the Guarantor or a
Consolidated Subsidiary pursuant to a receivables purchase
program or a loan secured by such receivables provided that
the value of (a) such receivables sold less amounts collected
on the receivables sold or (b) such receivables in which a
security interest is granted, shall not exceed $60,000,000 in the
aggregate at any one time.
"SRFI" means Superior Recycled Fiber Industries, a
Minnesota joint venture between LSPI Fiber and Superior
Recycled Fiber Corporation.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other
person performing similar functions are at the time directly or
indirectly owned by the Guarantor. For purposes of this
Agreement, neither LSPI nor LSPI Fiber shall be deemed to be
a Subsidiary of the Guarantor.
"Taxes" has the meaning set forth in Section 2.21(a).
"Total Commitment" shall mean the aggregate of the
Commitments of the Banks, as such may be reduced from time
to time pursuant to Section 2.09 or increased from time to time
pursuant to Section 2.01(c)(iii).
"Unfunded Vested Liabilities" means, with respect to any
Plan at any time, the amount (if any) by which (i) the present
value of all vested nonforfeitable benefits under such Plan
exceeds (ii) the fair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent
valuation date for such Plan, but only to the extent that such
excess represents a potential liability of the Guarantor or any
member of the Controlled Group to the PBGC or the Plan under
Title IV of ERISA.
"Wholly-Owned Consolidated Subsidiary" means any
Consolidated Subsidiary all of the shares of capital stock or
other ownership interests of which (except directors' qualifying
shares) are at the time directly or indirectly owned by the
Guarantor or one or more Wholly-Owned Consolidated
Subsidiaries or by the Guarantor and one or more
Wholly-Owned Consolidated Subsidiaries.
SECTION 1.02 Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required
to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes
approved by the Borrower's independent public accountants)
with the most recent audited consolidated financial statements
of the Borrower and its Consolidated Subsidiaries delivered to
the Banks.
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend.
During Revolving Credit Period. During the Revolving
Credit Period each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the
Borrower from time to time in amounts not to exceed in the
aggregate at any one time outstanding the amount of its
Commitment. Each Borrowing under this subsection shall be
made from the several Banks ratably in proportion to their
respective Commitments and shall be in an aggregate principal
amount of DM 3,000,000 or any larger integral multiple of DM
100,000. Within the foregoing limits, the Borrower may borrow
under this Section 2.01(a), repay under Section 2.02 or 2.11(a),
and reborrow under this Section 2.01(a) at any time during the
Revolving Credit Period.
After the Revolving Credit Period. On and after the
Revolving Credit Termination Date, each Bank severally agrees,
on the terms and conditions set forth in this Agreement, to
make Refinancing Loans to the Borrower on the last day of the
Interest Period for each outstanding Loan in an amount (except
as otherwise provided in Section 2.10) not greater than the
amount of the Loan or Loans made by such Bank maturing and
payable on such day (or, in the case of a Loan in an Alternative
Currency, in an amount not exceeding the Deutschmark
Amount thereof). The proceeds of each such Refinancing Loan
shall be used solely to repay the Loan or Loans so maturing
and payable on such day or so optionally prepaid on such day.
The obligations of the Banks to make Loans hereunder, other
than Refinancing Loans, shall cease on the Revolving Credit
Termination Date.
Extension of Commitment Termination Date. On or before
October 1, 1995, and on or before October 1 of every second
year thereafter, the Borrower may, by written notice to each
Bank, request that both the Revolving Credit Termination Date
and the Commitment Termination Date be extended for two
years, effective as of the following January 1, provided,
however, that no such request will be considered if the
Revolving Credit Termination Date and the Commitment
Termination Date were not extended upon any previous
request. The Banks will indicate their acceptance or rejection
of any requested extension as follows:
If all Banks notify the Borrower through the Agent in writing
within 30 days after receipt of notice of a requested extension
of their acceptance of the requested extension, the extension
shall be deemed to have been granted.
If Banks which hold in the aggregate less than one-third of
the outstanding Commitments of all of the Banks notify the
Borrower in writing (with copies to the Agent) within 30 days
after receipt of notice of a requested extension that they
consent to the requested extension, the extension shall be
deemed to have been rejected.
If Banks which hold in the aggregate one-third or more but
less than all of the outstanding Commitments of all of the
Banks notify the Borrower (with copies to the Agent) in writing
within 30 days after receipt of notice of a requested extension
that they consent to the requested extension, the extension
shall be deemed to have been rejected unless the Banks which
consented to the requested extension, or any combination of
the consenting Banks, agree, within 15 days after receipt from
the Borrower of written notice that one or more Banks have
consented to the extension, to increase their Commitment(s) by
the amount of the aggregate Commitments of the
non-consenting Banks. If the consenting Banks, or any
combination of them, agree to increase their Commitments by
the aggregate amount of the Commitments of the
non-consenting Banks, the requested extension shall be
deemed to have been granted and the Commitments of the
Banks altered as follows:
If only one Bank agrees to increase its Commitment,
the Commitment of such Bank shall be increased as of the
effective date of the extension by the amount of the
Commitments of the non-consenting Banks. If more than one
Bank agree to increase their Commitments, the Commitments
of the non-consenting Banks shall be allocated among the
Banks desiring increased Commitments in such proportion or
proportions as the Borrower in its sole discretion elects;
provided, however, that no Bank shall be required to accept an
increase in its Commitment which is larger than the increase to
which it has previously agreed.
On the effective date of the extension of the Revolving
Credit Termination Date and the Commitment Termination Date,
the Banks which have elected to increase their Commitments
shall make Loans to the Borrower, subject to the terms of
Section 3.01, in the amounts and in the currencies of the
aggregate principal balance of the Notes payable to the
non-consenting Banks. Each such Bank shall share in such
Loans in the same proportion as the amount by which its
Commitment is increased bears to the aggregate increases in
the Commitments of all of the consenting Banks. The proceeds
of all Loans made pursuant to this Section 2.01(c)(iii)(2) shall be
paid by the Banks making the same to the Agent which shall
promptly remit the proceeds of such Loans to the
non-consenting Banks in repayment of the Notes payable to
such Banks. Effective as of the effective date of the extension
of the Revolving Credit Termination Date and the Commitment
Termination Date, the Commitment(s) of the non-consenting
Bank(s) shall terminate. If the Revolving Credit Termination
Date and the Commitment Termination Date are extended
pursuant hereto, the Borrower shall deliver to each Bank a new
Note, substantially in the form of Exhibit A hereto, in the
amount of the Commitment of such Bank, dated as of the
effective date of the extension.
Notwithstanding the satisfaction of all conditions referred to
in this Agreement with respect to any Borrowing to be
denominated in Deutschmarks (whether pursuant to Section
2.04(c) or otherwise), if there shall occur on or prior to the date
of such borrowing any change in national or international
financial, political or economic conditions or currency exchange
rates or exchange controls which would in the opinion of the
Agent make it impracticable for the Loans comprising such
borrowing to be denominated in Deutschmarks, then the Agent
shall forthwith give notice thereof to the Borrower and the
Banks, and such Loans shall not be made.
SECTION 2.02 Maturity. Each Loan shall be paid in full by
the Borrower on the earlier of (i) the last day of the Interest
Period applicable thereto and (ii) the Commitment Termination
Date.
SECTION 2.03 Method of Borrowing.
The Borrower shall give the Agent notice (a "Notice of
Borrowing") by 10:00 a.m. (London time) at least three (one in
the case of the initial Borrowing and eight, in the case of a
Borrowing to be made in an Alternative Currency in accordance
with the provisions of Section 2.04) Business Days before each
Borrowing specifying:
the date of such Borrowing, which shall be a Business Day,
the aggregate amount (in Deutschmarks) of such
Borrowing, and
the duration of the Interest Period applicable to such
Borrowing.
Upon receipt of a Notice of Borrowing, the Agent shall
promptly notify each Bank of the contents thereof and of such
Bank's ratable share of such Borrowing and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.
Not later than 12:00 noon (London time) on the date of
each Borrowing, each Bank shall make available its ratable
share of such Borrowing, in Deutschmarks immediately
available to the Agent at its address specified pursuant to
Section 8.01, or, subject to the provisions of Section 2.04, if
such Borrowing is to be made in an Alternative Currency, make
available the Equivalent Amount of such Alternative Currency on
that day in such funds as may then be customary for the
settlement of international transactions in the Alternative
Currency) to the account of the Agent at such place as shall
have been notified by the Agent to the Banks by not less than
five Business Days' notice. Unless the Agent determines that
any applicable condition specified in Article III has not been
satisfied, the Agent will make the funds so received from the
Banks available to the Borrower at the Agent's aforesaid
address. Notwithstanding the foregoing provisions of this
Section, to the extent that a Loan made by a Bank matures on
the date of a requested Loan in the same currency, such Bank
shall apply the proceeds of the Loan it is then making to the
repayment of the maturing Loan.
SECTION 2.04 Loans in an Alternative Currency.
Each Bank severally agrees to make Loans pursuant to
Section 2.01 in an Alternative Currency upon satisfaction of
each of the following conditions:
the Borrower by notice to the Agent not less than
eight Business Days prior to the date of Borrowing shall have
requested that such Loans be denominated in an Alternative
Currency specified in such notice for the specified period to
constitute the Interest Period applicable to such Loan,
after giving effect to such Borrowing the Loans shall be
denominated in not more than two Alternative Currencies,
each of the Banks shall have confirmed its agreement that
such Loans shall be so denominated by notice to the Agent not
later than the close of business in London on the sixth Business
Day prior to the date of such Borrowing, and
not later than Noon (London time) on the fifth Business
Day prior to the date of such Borrowing the Agent shall have
received notice from the Borrower of its irrevocable election to
have such Loans so denominated.
Any Borrowing pursuant to Section 2.01 which is to be
made in an Alternative Currency in accordance with subsection
(a) shall be advanced in the Equivalent Amount of the
Deutschmark Amount thereof and shall be repaid or prepaid in
such Alternative Currency in the amount borrowed. Interest
payable on any Loan denominated in an Alternative Currency
shall be paid in such Alternative Currency.
Notwithstanding the satisfaction of all conditions referred to
in subsection (a) with respect to any Borrowing, if there shall
occur on or prior to the date of such Borrowing any change in
national or international financial, political or economic
conditions or currency exchange rates or exchange controls
which would in the opinion of the Agent make it impracticable
for the Loans comprising such Borrowing to be denominated in
the Alternative Currency specified by the Borrower, then the
Agent shall forthwith give notice thereof to the Borrower and the
Banks, and such Loans shall not be denominated in such
Alternative Currency but, subject to Section 2.01(d), shall be
made on the date of such Borrowing in Deutschmarks unless
the Borrower notifies the Agent at least three Business Days
before such date that it elects not to borrow on such date.
SECTION 2.05 Notes.
The Loans of each Bank shall be evidenced by a single
Note payable to the order of such Bank for the account of its
Lending Office in an amount equal to the aggregate unpaid
principal amount of such Bank's Loans.
Upon receipt of each Bank's Note pursuant to Section
3.02(a), the Agent shall forward such Note to such Bank. Each
Bank may record, and prior to any transfer of its Note may
endorse, on the schedules forming a part of the Note
appropriate notations to evidence the date and amount of each
Loan made by it and the date and amount of each payment of
principal made by the Borrower with respect thereto and, in the
case of Loans denominated in an Alternative Currency, the
currency, amount and Deutschmark Amount of such Loans.
Each Bank is hereby irrevocably authorized by the Borrower so
to record and endorse and to attach to and make a part of any
Note a continuation of any such schedule as and when
required.
SECTION 2.06 Interest Rate and Payment.
Each Loan shall bear interest on the outstanding principal
amount thereof, for each Interest Period applicable thereto, at
a rate per annum equal to the applicable Fixed Rate. Such
interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three months,
at intervals of three months after the first date thereof. Any
overdue principal of and, to the extent permitted by law,
overdue interest on, any Loan shall bear interest, payable on
demand, for each day from and including the date payment
thereof was due to but excluding the date of actual payment, at
a rate per annum equal to the sum of 1% plus the Margin plus
the quotient obtained (rounded upward, if necessary, to the
next higher 1/100 of 1%) by dividing (i) the interest rate per
annum at which one day (or, if such amount due remains
unpaid more than three Business Days, then for such other
period of time not longer than six months as the Agent may
elect) deposits in Deutschmarks in an amount approximately
equal to the Agent's portion of such overdue payment are
offered to the Agent in the London interbank market for the
applicable period determined as provided above by (ii) 1.00
minus the Reserve Percentage.
The "Fixed Rate" applicable to any Interest Period means a
rate per annum equal to the sum of (a) the quotient obtained
(rounded upwards, if necessary, to the next higher 1/100 of
1%) by dividing (i) the applicable Interbank Offered Rate by (ii)
1.00 minus the Reserve Percentage plus (b) the Margin.
The "Interbank Offered Rate" applicable to any Interest
Period means the average rate per annum (rounded upwards,
if necessary, to the next higher one hundred-thousandths of a
percent) at which deposits in Deutschmarks are offered to the
Agent by major banks in the interbank eurodollar market at
approximately 11:00 a.m. (London time) two Business Days
before the first day of such Interest Period in an amount
approximately equal to the Agent's portion of the principal
amount of the Borrowing to which such Interest Period is to
apply and for a period of time comparable to such Interest
Period.
The "Reserve Percentage" means for any day that
percentage expressed as a decimal (including all basic,
supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled
changes in reserve requirements during such Interest Period)
which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor)
which is the average of the reserve requirements for the Agent
in effect on such day in respect of new deposits having a
maturity comparable to the Interest Period for such Loan and
in an amount of $100,000 or more. The Fixed Rate shall be
adjusted automatically on and as of the effective date of any
change in the Reserve Percentage.
The "Margin" means
Leverage Ratio: Margin :
0.8:1 or less .300 of 1%
equal to or less than 1.2:1
but more than 0.8:1 .375 of 1%
more than 1.2:1 .550 of 1%
The following example (based upon assumptions in effect
as of February 11, 1994) will illustrate the calculation of a Fixed
Rate. Assuming an Interbank Offered Rate for a two month
Interest Period of 6.0%, a Reserve Percentage of 0%, and a
Margin of .300 of 1%, the Fixed Rate would equal:
.06
- ---------- + .00300 = .06 + .00300 = .06300 = 6.3%
1.00 - 0
The Agent shall determine each interest rate applicable to
the Loans hereunder and shall give prompt notice to the
Borrower and the other Banks by telex, telecopy or cable of
each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest error.
Except as described in this Section 2.06(c), for purposes of
determining Margin pursuant to Section 2.06(a), the Leverage
Ratio during any quarter will be treated as if it remained
constant during the quarter. The Leverage Ratio shall be
reported on a quarterly basis pursuant to Section 5.01(c). If as
reported at the end of any quarter the Leverage Ratio has
increased so that the Margin based upon such Leverage Ratio
will be higher than during the previous quarter (such increase
being a "Higher Level"), the Borrower shall report which month
during the preceding quarter the Higher Level occurred and
shall pay to the Agent for the account of each Bank in ratable
shares, for such month and all succeeding months of such
quarter, the difference between the Margin if paid at such
Higher Level and the Margin actually paid. The Borrower may
inform the Agent at any time by written notice, supported by a
summary balance sheet, that the Leverage Ratio has been
reduced so that the Margin based upon such Leverage Ratio
will be lower than previously (such reduction being a "Lower
Level"), and effective upon such notice shall pay as required by
this Agreement the Margin associated with such Lower Level.
SECTION 2.07 Facility Fees.
(a) During the Revolving Credit Period, the Borrower
shall pay to the Agent for the account of each Bank in ratable
shares a facility fee at the rate of .225 of 1% per annum on the
Total Commitment. Such facility fees shall accrue from and
including the date of this Agreement to but excluding the last
day of the Revolving Credit Period and shall be payable
quarterly in arrears on the last day of each calendar quarter
during the Revolving Credit Period.
(b) From and after the last day of the Revolving Credit
Period, the Borrower shall pay to the Agent for the account of
each Bank in ratable shares a facility fee on the amount of
Loans outstanding from time to time at the rate of .225 of 1%
per annum. Such facility fees shall be payable quarterly in
arrears on the last day of each calendar quarter and on the day
all outstanding Loans are paid in full.
SECTION 2.08 Duration of Interest Periods. The duration
of each Interest Period shall be as specified in the applicable
Notice of Borrowing.
SECTION 2.09 Termination or Reduction of Commitments.
The Borrower may, upon at least three Business Days' notice
to the Agent, terminate entirely at any time, or proportionately
reduce from time to time by an aggregate amount of DM
5,000,000 or any larger multiple of DM 1,000,000, the portions
of the Commitments in excess of the sum of the Loans
outstanding. If the Commitments are terminated in their
entirety, all accrued facility fees shall be payable on the effective
date of such termination.
SECTION 2.10 Required Repayments. The Borrower shall
repay, and there shall become due and payable, on each April
1, July 1, October 1 and January 1, beginning the April 1
following the Revolving Credit Termination Date and thereafter
until the Commitment Termination Date, an aggregate principal
amount of the Loans equal to one-sixteenth of the aggregate
principal amount of the Loans outstanding at the end of the
Revolving Credit Period; provided that in any event the
outstanding Loans shall be repaid in full on or before the
Commitment Termination Date. Each such required repayment
shall be applied to repay the Loans of the several Banks in
proportion to their respective Commitments. Payments made
pursuant to this Section may not be reborrowed. If at any time
after the end of the Revolving Credit Period the Borrower repays
any Loans in an amount which exceeds the sum of (a) principal
amounts then owing under this Section plus (b) the amount of
any Refinancing Loans borrowed to repay such Loans, then the
amount of such excess shall be applied to reduce the amount
of any subsequent repayment required by this Section in
inverse chronological order.
SECTION 2.11 No Optional Prepayment. The Borrower
may not prepay Loans prior to the last day of their respective
Interest Periods.
SECTION 2.12 General Provisions as to Payments.
The Borrower shall make each payment to be made
in Deutschmarks of principal of, and interest on, the Loans and
facility fees hereunder not later than 12:00 noon (London time)
on the date when due, in Deutschmark funds as may then be
customary for settlement of similar transactions immediately
available to the Agent at its address referred to in Section 8.01
(or in the case of fees payable in Dollars not later than 12:00
noon (New York time) on the date when due, in federal or other
funds immediately available to the Agent at such address. The
Agent will promptly distribute to each Bank its ratable share of
each such payment received by the Agent for the account of
the Banks.
All payments to be made by the Borrower hereunder or
under the Notes in an Alternative Currency pursuant to Section
2.04 shall be made in such Alternative Currency in such funds
as may then be customary for the settlement of international
transactions in such Alternative Currency for the account of the
Agent, at such time and at such place as shall have been
notified by the Agent to the Borrower and the Banks by not less
than four Business Days' notice. The Agent will promptly cause
such payments to be distributed to each Bank in like funds.
Whenever any payment of facility fees or principal of, or
interest on, any Loans shall be due on a day which is not a
Business Day, the date for payment thereof shall be extended
to the next succeeding Business Day unless as a result thereof
it would fall in the next calendar month, in which case it shall be
advanced to the next preceding Business Day. If the date for
any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended
time.
SECTION 2.13 Funding Losses. If the Borrower makes any
payment of principal with respect to any Loan for any reason on
any day other than the last day of an Interest Period applicable
thereto, or if the Borrower fails to borrow any Loans after notice
has been given to any Bank in accordance with Section 2.03(b),
the Borrower shall reimburse each Bank on demand for any
resulting loss or expense incurred by it, including without
limitation any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of
margin for the period after any such payment; provided that
such Bank shall have delivered to the Borrower a certificate as
to the amount of such loss or expense, which certificate shall
be conclusive in the absence of manifest error.
SECTION 2.14 Computation of Interest and Fees. Facility
fees shall be computed on the basis of a year of 365 days (or
366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day
thereof). Interest on Loans shall be computed on the basis of
a year of 360 days and paid for the actual number of days
elapsed, calculated as to each Interest Period from and
including the first day thereof to but excluding the last day
thereof.
SECTION 2.15 Lending Unlawful. In the event that any
Regulatory Change shall make it unlawful or impossible for any
Bank to make, maintain or fund any Loan, the obligation of
such Bank under Section 2.01 to make or maintain any Loan
shall, upon the happening of such Regulatory Change, forthwith
terminate and such Bank shall, by telephonic notice confirmed
in writing to the Borrower and the Agent, declare that such
obligation has so terminated. Upon receipt of such notice, the
Borrower shall immediately prepay in full the then outstanding
principal amount of each such Loan together with accrued
interest. If circumstances subsequently change so that such
Bank shall no longer be so affected, it shall so notify the
Borrower and the other Banks, whereupon the obligation of
such Bank under Section 2.01 to make or maintain any Loan
shall be reinstated.
SECTION 2.16 Funds Unavailable. Notwithstanding any
other provision of this Agreement, if, prior to the date on which
all or any portion of the principal amount of the Loans is to be
made, any Bank shall determine for any reason whatsoever
(which determination shall be conclusive and binding on the
Borrower), that
deposits in the applicable currency and amounts and for
the relevant Interest Period are not available to such Bank in the
relevant market, or
by reason of circumstances affecting the relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to such Loans,
such Bank shall promptly give notice to the Borrower and the
other Banks of such determination, and the obligation of such
Bank under Section 2.01 to make or maintain any Loan shall,
upon such notification, forthwith terminate and the Borrower
shall immediately prepay all such Loans, together with accrued
interest. If circumstances subsequently change so that such
Bank shall no longer be so affected, such Bank shall so notify
the Borrower and the other Banks, whereupon the obligation of
such Bank under Section 2.01 to make or maintain any Loan
shall be reinstated.
SECTION 2.17 Increased Costs and Reduced Returns.
If, after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by the
Banks (or their Lending Offices) with any request or directive
(whether or not having the force of law) of any such authority,
central bank or comparable agency:
shall subject any Bank to any tax, duty or other
charge with respect to its obligation to make Loans, its Loans,
or its Notes, or shall change the basis of taxation of payments
to such Bank of the principal of or interest on its Loans or in
respect of any other amounts due under this Agreement, in
respect of its Loans or its obligation to make Loans, (except for
changes in the taxation of the overall net income of such Bank);
or
shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System, but excluding any
included in a Reserve Percentage, as applicable), special
deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, such Bank or shall
impose on such Bank or the interbank eurocurrency market any
other condition affecting its obligation to make Loans, its Loans
or its Notes;
and the result of any of the foregoing is to increase the cost to
such Bank of making or maintaining any Loan, or to reduce the
amount of any sum received or receivable by such Bank under
this Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then, within 15
days after demand by such Bank, the Borrower agrees to pay
to such Bank such additional amount or amounts as will
compensate it for such increased cost or reduction.
If after the date hereof, any Bank shall have determined that
the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such
Bank with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's capital as
a consequence of its obligations hereunder to a level below that
which such Bank could have achieved but for such adoption,
change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time,
within 15 days after demand by such Bank, the Borrower shall
pay to such Bank such additional amount or amounts as will
compensate it for such reduction.
Each Bank will promptly notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section
2.17 and will designate a different branch or office with respect
to this Agreement, if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in
the sole judgment of such Bank, be otherwise disadvantageous
to such Bank. A certificate of each Bank claiming
compensation under this Section 2.17 and setting forth the
additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of manifest error. In determining
such amount, each Bank may use any reasonable averaging
and attribution methods.
If any Bank demands compensation under this Section
2.17, the Borrower may at any time, upon at least five Business
Days' prior notice to such Bank, prepay outstanding Loans of
such Bank, together with accrued interest to the date of
prepayment.
SECTION 2.18 Pro Rata Sharing. If any holder of any Note
shall obtain any payment (whether voluntary, involuntary, by
application of offset or otherwise) of principal of or interest on
such Note in excess of its pro rata share of payments then or
thereafter obtained by all holders of principal of or interest on
all Notes, such holder shall purchase from the other holders of
Notes such participations therein as shall be necessary for such
purchasing holder to share the excess payment received ratably
with such other holders; provided, however, that if all or any
portion of the excess payment is thereafter recovered from such
purchasing holder, the purchase shall be rescinded and the
purchase price restored pro rata according to the extent of such
recovery, but without interest. Upon the occurrence of an Event
of Default hereunder, all payments received by each Bank or
holder of any Note from the Borrower or otherwise received with
regard to the Borrower's obligations to such Bank (whether
such payments are voluntary, involuntary, by application of
offset or otherwise), notwithstanding such other indebtedness
of the Borrower to such Bank or holder, shall be applied in the
manner set forth in the immediately preceding sentence to the
extent such payments are in excess of such Bank's or holder's
pro rata share. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a
participation in a Note, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of set-off or
counterclaim and other rights with respect to such participation
as fully as if such holder of a participation were a direct creditor
of the Borrower in the amount of such participation.
SECTION 2.19 INTENTIONALLY OMITTED.
SECTION 2.20. Judgment Currency. If for the purposes of
obtaining judgment in any court it is necessary to convert a
sum due from the Borrower hereunder or under any of the
Notes in the currency expressed to be payable herein or under
the Note (the "specified currency") into another currency, the
parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Agent
could purchase the specified currency with such other currency
at the Agent's London office on the Business Day preceding
that on which final judgment is given. The obligations of the
Borrower in respect of any sum due to any Bank or the Agent
hereunder or under any Note shall, notwithstanding any
judgment in a currency other than the specified currency, be
discharged only to the extent that on the Business Day
following receipt by such Bank or the Agent (as the case may
be) of any sum adjudged to be so due in such other currency
such Bank or the Agent (as the case may be) may in
accordance with normal banking procedures purchase the
specified currency with such other currency; if the amount of
the specified currency so purchased is less than the sum
originally due to such Bank or the Agent, as the case may be,
in the specified currency, the Borrower agrees, to the fullest
extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify such Bank or
the Agent, as the case may be, against such loss, and if the
amount of the specified currency so purchased exceeds (a) the
sum originally due to any Bank or the Agent, as the case may
be, in the specified currency and (b) any amounts shared with
other Banks as a result of allocations of such excess as a
disproportionate payment to such Bank under Section 2.18,
such Bank or the Agent, as the case may be, agrees to remit
such excess to the Borrower.
SECTION 2.21. Taxes and Costs.
All payments made by the Borrower or the Guarantor of
principal of and interest on any Loans or of fees or other
amounts payable hereunder are payable without deduction for
or on account of any present or future taxes, duties or other
charges (except for income and franchise taxes of the
jurisdiction in which the Lending Office of a Bank is located or
under whose law such Bank is incorporated) levied or imposed
by the government of any jurisdiction or by any political
subdivision or taxing authority thereof or therein through
withholding or deduction with respect to any such taxes, duties
or other charges (hereinafter called, with such exceptions,
"Taxes"). If any Taxes are so levied or imposed the Borrower
or the Guarantor, as the case may be, will pay additional
interest or will make additional payments in such amounts so
that every net payment of principal of and interest on the Loans
and of other amounts payable hereunder, after withholding or
deduction for or on account of any present or future Taxes, will
not be less than the amount agreed. The Borrower or the
Guarantor, as the case may be, shall furnish to each Bank
certified copies of official receipts evidencing the payment by
the Borrower or the Guarantor, as the case may be, of all Taxes
so levied or imposed within 45 days after the date any such
payment is due pursuant to applicable law. In addition, the
Borrower will indemnify and hold harmless each Bank against
and reimburse to each Bank upon demand the amount of any
Taxes so levied or imposed and paid by such Bank. The
agreements of the Borrower and the Guarantor under this
Section 2.21 shall survive the repayment and cancellation of the
Loans.
If the cost to any Bank of making or maintaining any Loans
is increased, or the amount of any sum received or receivable
by any Bank (or its Lending Office) in respect of its Loans is
reduced, by an amount deemed by such Bank to be material,
by reason of the fact that the Borrower is incorporated in, or
conducts business in, a jurisdiction outside the United States,
the Borrower shall indemnify such Bank for the increased cost
or reduction within 15 days of demand by such Bank (with a
copy to the Agent). A certificate of any Bank claiming
compensation under this Section 2.21(b) and setting forth the
additional amount or amounts to be paid to it hereunder shall
be conclusive in the absence of manifest error.
Each Bank will promptly notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation or the payment of
additional amounts pursuant to this Section 2.21 and will
designate a different Lending Office if such designation will
avoid the need for, or reduce the amount of, such
compensation or additional amounts and will not, in the sole
judgment of such Bank, be otherwise disadvantageous to such
Bank.
ARTICLE III
CONDITIONS TO BORROWINGS
The obligations of each Bank to make a Loan on the
occasion of each Borrowing pursuant to Article II is subject to
the satisfaction of the following conditions:
SECTION 3.01 All Borrowings. In the case of each
Borrowing:
receipt by the Agent of a Notice of Borrowing as required
by Sections 2.03 or 2.04;
the fact that, as of the time immediately after such
Borrowing, no Default shall have occurred and be continuing;
the fact that the representations and warranties of the
Borrower and Guarantor contained in this Agreement shall be
true on and as of the date of such Borrowing; and
the fact that, as of the time immediately after such
Borrowing, the aggregate principal amount of all Loans
outstanding shall not exceed the Total Commitment hereunder.
Each Notice of Borrowing and Borrowing hereunder shall be
deemed to be a representation and warranty by the Borrower
on the date of such Borrowing as to the facts specified in
clauses (b), (c) and (d) of this Section.
SECTION 3.02 First Borrowing. On or before the date of
the execution and delivery of this Agreement:
receipt by each Bank for the account of such Bank of a
duly executed Note, dated on or before the date of such
Borrowing, complying with the provisions of Section 2.05;
receipt by each Bank of an opinion of counsel for the
Borrower and Guarantor, substantially in the form of Exhibit B
hereto;
receipt by each Bank of a certificate signed by an officer of
the Borrower and of the Guarantor, to the effect set forth in
clauses (b), (c) and (d) of Section 3.01, and containing the
resolutions of the Borrower and the Guarantor authorizing the
execution, delivery and performance of this Agreement, the
Notes and the Guaranty Agreement; and
receipt by each Bank of an incumbency certificate which
shall identify by name and title and bear the signatures of the
officers of the Borrower authorized to sign this Agreement and
the Notes, upon which certificate the Banks shall be entitled to
rely until informed in writing by the Borrower of any change.
The documents and opinions referred to in this Section shall be
delivered to each Bank no later than the date of the execution
and delivery of this Agreement. The certificate and opinions
referred to in clauses (b) and (c) above shall be dated no more
than ten Business Days before the date of the first Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower and Guarantor represent and warrant that:
SECTION 4.01 Corporate Existence and Power. The
Borrower is a limited liability company under the laws of
Germany, with its seat in Straubenhardt, Germany and
registered in the Handelsregister in the Amtsgericht Pforzheim,
and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to
carry on its business as now conducted and proposed to be
conducted. The Guarantor is a corporation duly incorporated,
validly existing and in good standing under the laws of
Minnesota and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 4.02 Corporate and Governmental Authorization;
Contravention. The execution, delivery and performance by the
Borrower and the Guarantor of this Agreement and by the
Borrower of the Notes are within their respective corporate
power, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the
Borrower or Guarantor respectively or of any agreement,
judgment, injunction, order, decree or other instrument binding
upon the Borrower or Guarantor respectively or result in the
creation or imposition of any Lien on any asset of the Borrower
or Guarantor respectively or any of the Guarantor's
Subsidiaries.
SECTION 4.03 Binding Effect. This Agreement constitutes
a valid and binding agreement of the Borrower and Guarantor
and the Notes, when executed and delivered in accordance
with this Agreement, will constitute valid and binding obligations
of the Borrower.
SECTION 4.04 Financial Information.
The consolidated balance sheet of the Guarantor and its
Consolidated Subsidiaries as of December 31, 1992 and the
related consolidated statements of income and cash flows for
the fiscal year then ended, reported on by Deloitte & Touche
and set forth in the Guarantor's annual report for the year
ended December 31, 1992 as filed with the Securities and
Exchange Commission on Form 10-K, a copy of which has
been delivered to each Bank, fairly present, in conformity with
generally accepted accounting principles, the consolidated
financial position of the Guarantor and its Consolidated
Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
The unaudited consolidated balance sheet of the Guarantor
and its Consolidated Subsidiaries as of September 30, 1993
and the related unaudited consolidated statements of income
and cash flows for the nine months then ended, set forth in the
Guarantor's quarterly report for the fiscal quarter ended
September 30, 1993 as filed with the Securities and Exchange
Commission on Form 10-Q, a copy of which has been delivered
to each Bank, fairly present, in conformity with generally
accepted accounting principles applied on a basis consistent
with the financial statements referred to in paragraph (a) of this
Section, the consolidated financial position of the Guarantor
and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such
nine-month period (subject to normal year-end adjustments).
Since September 30, 1993 there has been no material
adverse change in the business, financial position, results of
operations or prospects of the Guarantor and its Consolidated
Subsidiaries, considered as a whole.
SECTION 4.05 Litigation. There is no action, suit or
proceeding pending, or to the knowledge of the Borrower or
Guarantor threatened, against or affecting the Guarantor or any
of its Subsidiaries, including the Borrower, before any court or
arbitrator or any governmental body, agency or official in which
there is a reasonable possibility of an adverse decision which
could materially adversely affect the business, consolidated
financial position or consolidated results of operations of the
Borrower or the Guarantor and its Consolidated Subsidiaries or
which in any manner questions the validity of this Agreement or
the Notes.
SECTION 4.06 Compliance with ERISA. The Guarantor and
each member of the Controlled Group have fulfilled their
obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and are in compliance in all
material respects with the presently applicable provisions of
ERISA and the Code, and have not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.
SECTION 4.07 Taxes. The Guarantor and its Subsidiaries
have filed all foreign, United States federal, state and local
income, excise and other tax returns which are required to be
filed by them and have paid or made provision for the payment
of all taxes which have become due pursuant to such returns
or pursuant to any assessment in respect thereof received by
the Guarantor or any Subsidiary, except such taxes, if any, as
are being contested in good faith and for which adequate
reserves have been provided. The federal income tax liability
of the Guarantor has been determined by the Internal Revenue
Service and paid for all years prior to and including the fiscal
year ended December 31, 1982.
SECTION 4.08 Subsidiaries. Each of the Guarantor's
Subsidiaries is a corporation duly incorporated, validly existing
and in good standing under the laws of its jurisdiction of
incorporation and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
SECTION 4.09 Not an Investment Company. Neither the
Borrower nor the Guarantor is an "investment company" within
the meaning of the Investment Company Act of 1940, as
amended.
ARTICLE V
COVENANTS
The Borrower and Guarantor agree that so long as any
Bank has any Commitment hereunder or any amount payable
under any Note remains unpaid:
SECTION 5.01 Information. The Guarantor will deliver to
each of the Banks:
as soon as available and in any event within 90 days after
the end of each fiscal year of the Guarantor, a consolidated
balance sheet of the Guarantor and its Consolidated
Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income and cash flows for such
fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on in
accordance with the rules and regulations of the Securities and
Exchange Commission by Deloitte & Touche or other
independent public accountants of nationally recognized
standing;
as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of
the Guarantor, a consolidated balance sheet of the Guarantor
and its Consolidated Subsidiaries as of the end of such quarter
and the related consolidated statements of income and cash
flows for such quarter and for the portion of the Guarantor's
fiscal year ended at the end of such quarter, setting forth in
each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the
Guarantor's previous fiscal year, all certified (subject to normal
year-end adjustments) as to fairness of presentation, generally
accepted accounting principles and consistency by the chief
financial officer or the chief accounting officer of the Guarantor;
simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate
of the chief financial officer or the chief accounting officer of the
Guarantor (i) setting forth in reasonable detail the calculations
required to establish whether the Guarantor was in compliance
with the requirements of Sections 5.02 to 5.09, inclusive, on the
date of such financial statements and (ii) stating whether there
exists on the date of such certificate any Default and, if any
Default then exists, setting forth the details thereof and the
action which the Guarantor is taking or proposes to take with
respect thereto;
simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the
firm of independent public accountants which reported on such
statements (i) whether anything has come to their attention to
cause them to believe that there existed on the date of such
statements any Default and (ii) confirming the calculations set
forth in the officer's certificate delivered simultaneously
therewith pursuant to clause (c) above;
forthwith upon the occurrence of any Default, a certificate
of the chief financial officer or the chief accounting officer of the
Guarantor setting forth the details thereof and the action which
the Guarantor is taking or proposes to take with respect
thereto;
promptly upon the mailing thereof to the shareholders of
the Guarantor generally, copies of all financial statements,
reports and proxy statements so mailed;
promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and annual, quarterly
or monthly reports which the Guarantor shall have filed with the
Securities and Exchange Commission;
if and when the Guarantor or any member of the Controlled
Group gives or is required to give notice to the PBGC of any
"reportable event" (as defined in Section 4043 of ERISA) with
respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that
the plan administrator of any Plan has given or is required to
give notice of any such reportable event, a copy of the notice
of such reportable event given or required to be given to the
PBGC;
simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a balance
sheet and statement of income of LSPI for the corresponding
period in detail reasonably comparable to the information
provided by the Guarantor with respect to its Consolidated
Subsidiaries on its reports as filed with the Securities and
Exchange Commission on Form 10-K or Form 10-Q;
from time to time such additional information regarding the
financial position or business of the Borrower or the Guarantor
as the Agent, at the request of any Bank, may reasonably
request;
as soon as available and in any event (i) within 90 days
after the end of each fiscal year of the Guarantor and (ii) within
45 days of the end of each of the first three quarters of each
fiscal year of the Guarantor, a consolidating balance sheet and
the related consolidating statement of income, with respect only
to Guarantor's operating businesses, for the relevant fiscal
period (and, for interim fiscal quarters, for the portion of the
year ended at the end of such adjustments) certified as to
fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer or the
chief accounting officer of the Guarantor; and
as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, a balance sheet of
the Borrower as of the end of such fiscal year and the related
statement of income for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year,
certified as to fairness of presentation, GOB (generally accepted
accounting principals in Germany) and consistency by the chief
financial officer or the chief accounting officer of the Borrower;
and
simultaneously with the delivery of the financial statements
referred to in clause (l) above, a certificate of the chief financial
officer or the chief accounting officer of the Borrower stating
whether there exists on the date of such certificate any Default
and, if any Default then exists, setting forth the details thereof
and the action which the Borrower is taking or proposes to take
with respect thereto.
SECTION 5.02 Current Assets. Consolidated Current
Assets will at no time be less than 120% of Consolidated
Current Liabilities.
SECTION 5.03 Leverage Ratio. The Leverage Ratio will at
no time exceed 2.0:1.0 and the ratio of Funded Debt to
Consolidated Tangible Net Worth will at no time exceed 1.5:1.0.
SECTION 5.04 Minimum Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth will at no time be less than
the sum of (a) $300,000,000 plus (b) 50% of Consolidated
Cumulative Net Income, plus (c) 80% of proceeds of all classes
of equity securities issued by the Guarantor after February 11,
1994, plus (d) 80% of the amount by which the principal of the
Loan made March 7, 1990 by the Guarantor to the Pentair
ESOP Trust is reduced after December 31, 1993.
SECTION 5.05 Expense Ratio. At any time when the
Leverage Ratio exceeds 1.2:1.0, as of the end of each quarter
of each of the Guarantor's fiscal years, the ratio of (a)
consolidated net income before taxes plus (to the extent
deducted in calculating net income before taxes) interest and
rent expense to (b) rent and interest expense, calculated on a
cumulative basis for the four most recent fiscal quarters and
excluding in each case rent and interest expense of LSPI and
of any other joint venture or entity in which the Guarantor or a
Consolidated Subsidiary has an ownership interest but which is
not a Subsidiary, will not be less than 1.5:1.0.
SECTION 5.06 Subsidiary Debt. Debt incurred by the
Wholly-Owned Consolidated Subsidiaries from and after the
date of this Agreement and outstanding at any time, excluding:
obligations assumed in connection with acquisitions;
Debt incurred in respect of LSPI;
Debt incurred by such Subsidiary in a country other than
the United States or Canada with respect to operations in such
country including specifically but not exclusively indebtedness
incurred under this Agreement; and
Debt incurred in respect of any Sale of Receivables;
will not exceed fifteen percent (15%) of Consolidated Tangible
Net Worth.
SECTION 5.07 Negative Pledge. Neither the Guarantor nor
any Consolidated Subsidiary will create, assume or suffer to
exist any Lien securing Debt on any asset now owned or
hereafter acquired by it, except:
Liens existing on the date of this Agreement; each Lien
which secures Debt in an aggregate principal amount of more
than $1,000,000 is disclosed in the financial information referred
to in Section 4.04;
any Lien existing on any asset of any corporation at the
time such corporation becomes a Consolidated Subsidiary and
not created in contemplation of such event;
any Lien on any asset securing Debt incurred or assumed
for the purpose of financing all or any part of the cost of
acquiring such asset, provided that such Lien attaches to such
asset concurrently with or within 90 days after the acquisition
thereof;
any Lien on any asset of any corporation existing at the
time such corporation is merged into or consolidated with the
Guarantor or a Consolidated Subsidiary and not created in
contemplation of such event;
any Lien existing on any asset prior to the acquisition
thereof by the Guarantor or a Consolidated Subsidiary and not
created in contemplation of such acquisition;
any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any
of the foregoing clauses of this Section, provided that such
Debt is not increased and is not secured by any additional
assets;
any Lien arising pursuant to any order of attachment,
distraint or similar legal process arising in connection with court
proceedings so long as the execution or other enforcement
thereof is effectively stayed and the claims secured thereby are
being contested in good faith by appropriate proceedings;
any Lien on trade receivables arising from a Sale of
Receivables; and
Liens not otherwise permitted by the foregoing clauses of
this Section securing Debt in an aggregate principal amount at
any time outstanding not exceeding 15% of Consolidated
Tangible Net Worth.
SECTION 5.08 Consolidations, Mergers and Sales of
Assets. Neither the Borrower nor the Guarantor will merge or
consolidate with any other Person or sell, lease, transfer or
otherwise dispose of substantially all of its assets as an entirety
to any other Person unless:
the Person surviving the merger or consolidation is
the Borrower or the Guarantor, as the case may be; and
immediately after giving effect to any such action, no
Default shall have occurred and be continuing.
SECTION 5.09 Acquisitions. At any time when the
Leverage Ratio exceeds 1.2:1, the Guarantor will not acquire
other businesses if the aggregate amount of cash used for such
acquisitions since the Leverage Ratio remained in excess of
1.2:1 exceeds $50,000,000.
SECTION 5.10 Use of Proceeds. The proceeds of the
Loans made under this Agreement will be used by the Borrower
for general corporate purposes including future acquisitions,
capital expenditures and working capital. None of such
proceeds will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or
carrying any "margin stock" within the meaning of Regulation U
of the Board of Governors of the Federal Reserve System.
Neither the Borrower nor the Guarantor will engage principally,
or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any such
margin stock within the meaning of such Regulation U.
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and
be continuing:
the Borrower shall fail to pay within five days of the date
due any principal of or interest on any Note, any fees or any
other amount payable hereunder;
the Borrower or the Guarantor shall fail to observe or
perform any covenant contained in Sections 5.02 to 5.09,
inclusive;
the Borrower or Guarantor shall fail to observe or perform
any other covenant or agreement contained in this Agreement
for 30 days after written notice thereof has been given to the
Borrower by the Agent at the request of any Bank;
any representation, warranty, certification or statement
made by the Borrower or Guarantor in this Agreement or in any
certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been incorrect
in any material respect when made;
any event or condition shall occur which results in the
acceleration of the maturity of any Debt (other than the Notes)
of the Guarantor or any Subsidiary equal to or exceeding
$10,000,000 in the aggregate for all such Debt or enables (or,
with the giving of notice or lapse of time or both, would enable)
the holder of any such Debt or any Person acting on such
holder's behalf to accelerate the maturity thereof;
the Borrower, Guarantor or any Subsidiary shall commence
a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property or shall consent to any such
relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced
against it or shall make a general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become
due or shall take any corporate action to authorize any of the
foregoing;
an involuntary case or other proceeding shall be
commenced against the Borrower, the Guarantor or any
Subsidiary seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property and
such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower, Guarantor or
any Subsidiary under the federal bankruptcy laws or similar
bankruptcy or insolvency laws of any other applicable
jurisdiction as now or hereafter in effect;
the Guarantor or any member of the Controlled Group shall
fail to pay when due an amount or amounts aggregating in
excess of $5,000,000 which it shall have become liable to pay
to the PBGC or to a Plan under Title IV of ERISA; or the
Guarantor or any member of the Controlled Group shall file a
distress termination notice with the PBGC and the amount of
the Unfunded Vested Liabilities under that filing exceeds
$2,500,000; or the PBGC shall institute proceedings under Title
IV of ERISA to terminate or to cause a trustee to be appointed
to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans to enforce
Section 515 of ERISA and such proceeding shall not have been
dismissed within 30 days thereafter; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any such Plan or Plans must be terminated;
a judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Guarantor or any
Subsidiary and such judgment or order shall continue
unsatisfied and unstayed for a period of 60 days;
any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 50% or more of the
outstanding shares of voting stock of the Guarantor; or
within a period of twelve consecutive months, three-fourths
of the directors of the board of directors of the Guarantor shall
have changed;
then, and in every such event, (1) in the case of any of the
Events of Default specified in paragraphs (a) through (e), or (h)
through (k) above, the Agent shall (i) if requested by Banks
having 50% or more in aggregate amount of the Commitments,
by notice to the Borrower and Guarantor terminate the
Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing 50% or more in
aggregate principal amount of the Loans, by notice to the
Borrower and Guarantor declare the Notes (together with
accrued interest thereon) to be, and the Notes shall thereupon
become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower and Guarantor; (2) in the case
of any of the Events of Default specified in paragraph (f) or (g)
above, without any notice to the Borrower and Guarantor or any
other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower and
Guarantor; and (3) in the case of any of the Events of Default
specified in paragraph (j) or (k) above, in addition to the actions
permitted to be taken pursuant to clause (1) above, if such
Event of Default is due to an unfriendly attempt to acquire
control of the Guarantor (as declared in a resolution of the
board of directors of the Guarantor), the Banks may declare an
additional amount not greater than 10% of the Total
Commitment at such time to be immediately due and payable
to the extent such amount is permitted by applicable law.
SECTION 6.02 Notice of Default. The Agent shall give
notice to the Borrower and Guarantor under Section 6.01(c)
promptly upon being requested to do so by any Bank and shall
thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization. Each Bank
irrevocably appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers
under this Agreement and the Notes as are delegated to the
Agent by the terms hereof or thereof, together with all such
powers as are reasonably incidental thereto.
SECTION 7.02 Agent and Affiliates. The Agent shall have
the same rights and powers under this Agreement as any other
Bank and may exercise or refrain from exercising the same as
though it were not the Agent and the Agent and its affiliates
may accept deposits from, lend money to, and generally
engage in any kind of business with the Borrower or any
Subsidiary or affiliate of the Borrower as if it were not the Agent
hereunder.
SECTION 7.03 Action by Agent. The obligations of the
Agent hereunder are only those expressly set forth herein.
Without limiting the generality of the foregoing, the Agent shall
not be required to take any action with respect to any Default
except as expressly provided in Article VI.
SECTION 7.04 Consultation with Experts. The Agent may
consult with legal counsel (who may be counsel for the
Borrower or the Guarantor), independent public accountants
and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05 Liability of Agent. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable for
any action taken or not taken by it in connection herewith (i)
with the consent or at the request of all of the Banks or (ii) in
the absence of its own gross negligence or willful misconduct.
Neither the Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with this Agreement or any
borrowing hereunder, including any notice given orally by the
Borrower as permitted by the terms of this Agreement; (ii) the
performance or observance of any of the covenants or
agreements of the Borrower; (iii) the satisfaction of any
condition specified in Article III, except receipt of items required
to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other
instrument or writing furnished in connection herewith. The
Agent shall not incur any liability by acting in reliance upon any
notice, consent, certificate, statement or other writing (which
may be a bank wire, telex or similar writing) or oral notice
permitted hereunder and believed by it to be genuine or to be
signed or given by the proper party or parties.
SECTION 7.06 Indemnification. Each Bank shall, ratably in
accordance with its Commitment, indemnify the Agent (to the
extent not reimbursed by the Borrower) against any cost,
expense (including counsel fees and disbursements), claim,
demand, action, loss or liability (except such as result from the
Agent's gross negligence or willful misconduct) that the Agent
may suffer or incur in connection with this Agreement or any
action taken or omitted by the Agent hereunder.
SECTION 7.07 Agent's Fees. The Borrower shall pay to the
Managing Agent, in addition to legal and other expenses
described in Section 8.03, an agency fee of $35,000 per
annum, payable annually in advance, with the first payment of
$35,000 payable on January 1, 1995 and with successive
payments payable on the first day of each January beginning
January 1, 1996 so long as this Agreement shall be in effect.
SECTION 7.08 Bank Credit Decision. Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank and based on the financial
statements prepared by the Borrower and such other
documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other
Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.
SECTION 7.09 Successor Agent. The Agent may resign at
any time by giving written notice thereof to the Banks and the
Borrower, and the Agent may be removed at any time with
cause by written notice received by the Agent from the
Required Banks. Upon any such resignation or removal,
provided no Default exists, the Borrower shall have the right to
appoint another Bank as successor Agent subject to the
consent of the Required Banks, which consent shall not be
unreasonably withheld. If such consent is not obtained within
30 days, or if a Default exists, then the Required Banks shall
have the right to appoint, on behalf of the Borrower and the
Banks, a successor Agent. If no successor Agent shall have
been so appointed by the Required Banks and shall have
accepted such appointment within thirty days after the retiring
Agent's giving notice of resignation, then the retiring Agent may
appoint, on behalf of the Borrower and the Banks, a successor
Agent. Such successor Agent shall be a commercial bank with
an office in the United States and capital and retained earnings
of at least $250,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article VII
shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the
Agent hereunder.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Notices. All notices, requests and other
communications to any party hereunder shall be in writing
(including bank wire, telex, telecopy or similar writing), except
where specifically permitted to be given orally, and shall be
given to such party at its address or telex number set forth on
the signature pages hereof or such other address or telex
number as such party may hereafter specify for the purpose by
notice to the Agent and the Borrower. Each such notice,
request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number
specified in this Section and the appropriate answer back is
received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified in this Section;
provided that notices to the Agent under Sections 2.01, 2.03,
2.04, 2.06, 2.09, 2.15 or 2.16 shall not be effective until
received.
SECTION 8.02 No Waiver. No failure or delay by the Agent
or any Bank in exercising any right, power or privilege
hereunder or under any Note shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 8.03 Expenses; Documentary Taxes. The
Borrower shall pay upon demand (i) all reasonable expenses of
the Agent, including fees and disbursements of attorneys for
the Agent (who may be employees of the Agent), in connection
with the preparation of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged
Default by the Borrower hereunder and (ii) if an Event of Default
occurs, all reasonable out-of-pocket expenses incurred by the
Agent and the Banks, including fees and disbursements of
attorneys for the Agent and the Banks (who may be employees
of the Agent and the Banks), in connection with such Event of
Default and collection and other enforcement proceedings
resulting therefrom. The Borrower shall indemnify each Bank
against any transfer taxes, documentary taxes, assessments or
charges made by any governmental authority by reason of the
execution and delivery of this Agreement or the Notes.
SECTION 8.04 Amendments and Waivers. Any provision
of this Agreement or the Notes may be amended or waived if,
but only if, such amendment or waiver is in writing and is
signed by the Borrower and the Required Banks (and, if the
rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless
signed by all the Banks,
increase the Commitment of any Bank or subject
any Bank to any additional obligations,
reduce the principal of or rate of interest on any Loans or
any fees (other than fees provided for in Section 7.07)
hereunder,
postpone the date fixed for any payment of principal of or
interest on any Loan or any fees (other than fees provided for
in Section 7.07) hereunder,
change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number
of Banks which shall be required for the Banks or any of them
to take any action under this Agreement, or
amend this Section 8.04.
SECTION 8.05 Collateral. Each of the Banks represents
that it in good faith is not relying upon any "margin stock" (as
defined in Regulation U of the Board of Governors of the
Federal Reserve System) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 8.06 Successors and Assigns.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this
Agreement.
Any Bank may at any time sell, assign, transfer, grant
participations in, or otherwise dispose of, all or any portion of
its Loans or Notes or of its right, title and interest therein or
thereto or in or to this Agreement (collectively, "Participations")
to any other lending office or to any other Person
("Participants"), subject to the terms contained in this Section
8.06. Such Bank shall give Notice to the Borrower of any
Participation exceeding six months in duration or granting a
Participation in this Agreement. No agreement between any
Bank and a Participant may limit the right of such Bank to
consent to amendments to this Agreement unless the Borrower
shall have consented in advance (which consent shall not be
unreasonably withheld) to the grant of a Participation to such
Participant. Notwithstanding the foregoing, the consent of the
Borrower is not required for the grant of a Participation on
terms which require the Participant's consent to any
amendment of this Agreement which reduces the principal of or
rate of interest on the Participation or postpones the date (other
than by way of extension pursuant to Section 2.01(c)) fixed for
payment of principal or interest on the Participation. The
Borrower agrees that any Participant may exercise any and all
rights of banker's lien, setoff and counterclaim with respect to
its Participation as fully as if such Participant were the holder of
a Loan in the amount of its Participation.
No Participant shall be entitled to receive any greater
payment under Section 2.13, 2.17 or 2.21 than the Bank
granting the Participation would have been entitled to receive
with respect to the rights assigned or otherwise transferred.
SECTION 8.07 Minnesota Law. This Agreement and each
Note shall be construed in accordance with and governed by
the laws of the State of Minnesota.
SECTION 8.08 Counterparts; Effectiveness. This
Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when the Agent shall
have received counterparts hereof signed by all of the parties
hereto.
SECTION 8.09 Highly Leveraged Transaction Classification.
If the Agent (a) receives notice from any Bank that such Bank
has received notice from a governmental authority having
jurisdiction over such Bank requiring that the Loans be
classified as an "HLT" or "Highly Leveraged Transaction" or (b)
determines that the Loans meet the criteria under which the
Loans are required by the applicable governmental authority to
be classified as an HLT, the Agent shall promptly give notice
thereof to the Borrower, the Guarantor and the Banks. The
parties hereto shall, as soon as practicable thereafter,
commence negotiations in good faith to reach agreement in a
manner satisfactory to all parties on the extent to which fees or
margins under this Agreement should be increased so as to
reflect the average incremental increase in pricing of loans that
are classified as HLTs as compared to the same loans if they
were not HLTs. If agreement is not reached within 90 days, the
Banks may establish the increases to the fees and margins and
give notice thereof to the Borrower and the Guarantor, provided
that in no event shall the aggregate increases in fees and
margins pursuant to this Section exceed fifty basis points. The
Banks acknowledge that such an HLT classification is not a
Default or an Event of Default under the Agreement. For
purposes of this Section, "HLT" or "Highly Leveraged
Transaction" means the definition of "highly leveraged
transaction" as promulgated by the Comptroller of the Currency,
the Federal Deposit Insurance Corporation, and the Board of
Governors of the Federal Reserve System on October 30, 1989,
in Banking Circular 242 or any successor definition adopted by
such governmental authorities.
ARTICLE IX
GUARANTY
SECTION 9.01. Guaranty. The Guarantor hereby
unconditionally guarantees the full and punctual payment
(whether at stated maturity, upon acceleration or otherwise) of
the principal of and interest on each Note issued by the
Borrower pursuant to this Agreement, and the full and punctual
payment of all other amounts payable by the Borrower under
this Agreement. Upon failure by the Borrower to pay punctually
any such amount, the Guarantor shall forthwith on demand pay
the amount not so paid at the place and in the manner
specified in this Agreement.
SECTION 9.02. Guaranty Unconditional. The obligations
of the Guarantor hereunder shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower under this
Agreement or any Note, by operation of law or otherwise;
any modification or amendment of or supplement to this
Agreement or any Note;
any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of the Borrower
under this Agreement or any Note;
any change in the corporate existence, structure or
ownership of the Borrower, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the
Borrower or its assets or any resulting release or discharge of
any obligation of the Borrower contained in this Agreement or
any Note;
the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the Borrower, the
Agent, any Bank or any other corporation or person, whether
in connection herewith or any unrelated transactions, provided
that nothing herein shall prevent the assertion of any such claim
by separate suit or compulsory counterclaim;
any invalidity or unenforceability relating to or against the
Borrower for any reason of this Agreement or any Note, or any
provision of applicable law or regulation purporting to prohibit
the payment by the Borrower of the principal of or interest on
any Note or any other amount payable by the Borrower under
this Agreement; or
any other act or omission to act or delay of any kind by the
Borrower, the Agent, any Bank or any other corporation or
person or any other circumstance whatsoever which might, but
for the provisions of this paragraph, constitute a legal or
equitable discharge of the Guarantor's obligations hereunder.
SECTION 9.03. Discharge only upon Payment in Full;
Reinstatement in Certain Circumstances. The Guarantor's
obligations hereunder shall remain in full force and effect until
the Commitments shall have terminated and the principal of
and interest on the Notes and all other amounts payable by the
Borrower under this Agreement shall have been paid in full. If
at any time any payment of the principal of or interest on any
Note or any other amount payable by the Borrower under this
Agreement is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of
the Borrower or otherwise, the Guarantor's obligations
hereunder with respect to such payment shall be reinstated as
though such payment had been due but not made at such
time.
SECTION 9.04. Waiver by the Guarantor. The Guarantor
irrevocably waives acceptance hereof, presentment, demand,
protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any
corporation or person against the Borrower or any other
corporation or person.
SECTION 9.05. Subrogation. The Guarantor irrevocably
waives any and all rights to which it may be entitled, by
operation of law or otherwise, upon making any payment
hereunder to be subrogated to the rights of the payee against
the Borrower with respect to such payment or against any
direct or indirect security therefor, or otherwise to be
reimbursed, indemnified or exonerated by or for the account of
the Borrower in respect thereof.
SECTION 9.06. Stay of Acceleration. If acceleration of the
time for payment of any amount payable by the Borrower under
this Agreement or the Notes is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of this
Agreement shall nonetheless be payable by the Guarantor
hereunder forthwith on demand by the Agent made at the
request of the requisite proportion of the Banks specified in
Article VI of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
EUROPENTAIR GmbH EUROPENTAIR GmbH
By: Gerald C. Kitch By: Roy T. Rueb
Title: Geschaeftsfuehrer Title: Prokurist
Waters Edge Plaza Waters Edge Plaza
1500 County Road B2 West 1500 County Road B2 West
St. Paul, Minnesota 55113 St. Paul, Minnesota 55113
Attention: Chief Financial Officer Attention: Chief Financial
Officer
Telecopy: (612) 639-5209 Telecopy: (612) 639-5209
Telephone: (612) 636-7920 Telephone: (612) 636-7920
PENTAIR, INC.
By: Joseph R. Collins
Title: Chief Financial Officer
Waters Edge Plaza
1500 County Road B2 West
St. Paul, Minnesota 55113
Attention: Chief Financial Officer
Telecopy: (612) 639-5209
Telephone: (612) 636-7920
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, for itself and
as Agent
By:William J. Stevenson
Title: Vice President
60 Victoria Embankment
London EC4Y OJP
Attn: Credit Operations
Telex number: 896631 MGT
Telecopy: (071) 325-8114
Telephone: (071) 325-1484
with a copy to:
60 Wall Street
New York, New York 10260
Attn: John M. Mikolay
Telex number: 177615 MGT UT
Telecopy: (212) 837-5022
Telephone: (212) 648-6988
CONTINENTAL BANK N.A.,
for itself and as Agent
By: Barry Watters
Title: Vice President
231 South LaSalle Street
Chicago, Illinois 60697
Attn: Barry Watters
Telephone: (312) 828-6307
Telecopy: (312) 987-1276
Person to whom Loan correspondence
should be addressed:
Beverly Boone
231 South LaSalle Street
Chicago, Illinois 60697
Telephone: (312) 828-1295
Telecopy: (312) 765-2080
NBD BANK, N.A.
By: Patrick Skiles
Title: Vice President
611 Woodward Avenue
Detroit, Michigan 48226
Attn: Patrick P. Skiles
Telephone: (313) 225-1798
Telecopy: (313) 225-1671
DRESDNER BANK AG CHICAGO
AND GRAND CAYMAN BRANCHES
By: John H. Schaus
Title: First Vice President
By: W. J. Murray
Title: Vice President
190 South LaSalle Street
Chicago, IL 60603
Attn: William J. Murray
Telephone: (312) 444-1318
Telecopy: (312) 444-1305
Operations Contact:
Ms. Feixiao Dai
Dresdner Bank AG
75 Wall Street
New York, NY 10005
Telephone: (212) 574-0269
Telecopy: (212) 574-0130
EXHIBIT A
NOTE
Minneapolis, Minnesota
, 1994
For value received, EuroPentair GmbH, a German limited
liability company (the "Borrower"), promises to pay to the order
of (the "Bank") the aggregate unpaid principal amount of all
Loans made by the Bank to the Borrower pursuant to the
Facility Agreement referred to below, together with interest on
the unpaid principal amounts thereof at the rates and on the
dates set forth in the Facility Agreement. The Borrower shall
pay each Loan in full on the earlier of (i) the last day of its
Interest Period, including principal payments due on each
Principal Repayment Date and (ii) the Commitment Termination
Date.
All payments of principal and interest shall be made (i) if in
Deutschmarks, in lawful money of the Federal Republic of
Germany in such funds as may then be customary for the
settlement of international transactions in Deutschmarks at the
office of Morgan Guaranty Trust Company of New York,
London, England or (ii) if in an Alternative Currency, in such
funds as may then be customary for the settlement of
international transactions in such Alternative Currency at the
place specified for payment thereof pursuant to the Facility
Agreement.
All Loans made by the Bank to the Borrower pursuant to
the Facility Agreement and all payments of the principal thereof
may be recorded by the Bank and, prior to any transfer hereof,
endorsed by the Bank on the schedule attached hereto, or on
a continuation of such schedule attached to and made a part
hereof.
This Note is one of the Notes referred to in the
Deutschmark Facility Agreement dated February 11, 1994
among the Borrower, Pentair, Inc., the banks listed on the
signature pages thereof and Morgan Guaranty Trust Company
of New York and Continental Bank N.A., as Agents (as
amended from time to time, the "Facility Agreement").
Reference is made to such Facility Agreement for provisions for
the prepayment hereof and the acceleration of the maturity
hereof.
PENTAIR, INC.
By
Title:
LOANS AND PAYMENTS OF PRINCIPAL
Type Amount of
Amount of Principal Maturity Notation
Date of Loan Loan Repaid Date Made By
Exhibit B
OPINION OF COUNSEL FOR THE BORROWER
[Date as provided in Section 3.02 of the Facility Agreement]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10015
Gentlemen:
We have acted as counsel for EuroPentair GmbH (the
"Borrower") and for Pentair, Inc. (the "Guarantor") in connection
with the Deutschmark Facility Agreement (the "Facility
Agreement") dated as of February 11, 1994 among the
Borrower, the Guarantor, NBD Bank, N.A., Dresdner Bank AG,
Morgan Guaranty Trust Company of New York and Continental
Bank N.A., for themselves and as Agents. Terms defined in the
Facility Agreement are used herein as therein defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and other
instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for
purposes of this opinion. In such examination we have
assumed the genuineness of all signatures, the authority of all
documents submitted to us as originals and the conformity with
the originals of all documents submitted to us as copies. We
also assume, for the purposes of this opinion, the due
execution and delivery of the Facility Agreement by each of the
Banks.
Upon the basis of the foregoing, we are of the opinion that:
The Borrower is a limited liability company validly existing
under the laws of Germany and has all corporate power and all
material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
The execution, delivery and performance by the Borrower
of the Facility Agreement and the Notes are within the
Borrower's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official and
do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of
incorporation or by-laws of the Borrower or of any agreement,
judgment, injunction, order, decree or other instrument binding
upon the Borrower or result in the creation or imposition of any
Lien on any asset of the Borrower or any of its Subsidiaries.
The Facility Agreement constitutes a valid and binding
agreement of the Borrower and the Notes constitute valid and
binding obligations of the Borrower, enforceable in accordance
with their respective terms, except as the enforceability thereof
may be limited by bankruptcy, moratorium, insolvency or other
laws of general application relating to the enforcement of
creditors' rights or by general principles of equity.
The Guarantor is a corporation validly existing and in good
standing under the laws of Minnesota and has all corporate
power and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as
now conducted.
The execution, delivery and performance by the Guarantor
of the Facility Agreement are within the Guarantor's corporate
powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the
Guarantor or of any agreement, judgment, injunction, order,
decree or other instrument binding upon the Guarantor or result
in the creation or imposition of any Lien on any asset of the
Guarantor or any of its Subsidiaries.
The Facility Agreement constitutes a valid and binding
agreement of the Guarantor, enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, moratorium, insolvency or other laws of general
application relating to the enforcement of creditors' rights or by
general principles of equity.
There is no action, suit or proceeding pending, or to the
best of our knowledge threatened, against or affecting the
Borrower or Guarantor or any of their respective Subsidiaries
before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an
adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results
of operations of the Borrower and its Consolidated Subsidiaries,
or which in any manner questions the validity of the Facility
Agreement or the Notes.
Each of the Borrower's and the Guarantor's Subsidiaries is
a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and
has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to
carry on its business as now conducted.
There is no income, stamp or other tax of the Federal
Republic of Germany, or any taxing authority thereof or therein,
imposed by or in the nature of withholding or otherwise, which
is imposed on any payment to be made by the Borrower
pursuant to the Facility Agreement or the Notes, or is imposed
on or by virtue of the execution, delivery or enforcement of the
Facility Agreement or of the Notes.
As to any matter relating to the Borrower in paragraphs 1
through 3, 7 and 8 above and as to the opinion expressed in
Paragraph 9 above, we have, with your consent, relied solely on
the opinion of Faegre & Benson, Frankfurt, Germany, special
international counsel to the Borrower and Guarantor, a copy of
which opinion is attached.
EXHIBIT 99
PENTAIR
WATERS EDGE PLAZA
1500 COUNTY ROAD B2 WEST
SAINT PAUL, MN 55113-3105
612.636.7920
NEWS RELEASE
DATE: DECEMBER 22, 1993
FOR RELEASE: IMMEDIATELY
CONTACT: MARK CAIN (612) 636-7920
PENTAIR COMPLETES SCHROFF ACQUISITION
ST PAUL, MN - Pentair, Inc. (NASDAQ/NMS:PNTA), the St.
Paul-based manufacturer of industrial products and paper,
today announced it has completed the acquisition of the Schroff
Group, Straubenhardt, Germany. The transaction included the
net assets and business of the Schroff Group, including its
international subsidiaries. The purchase is retroactive to
January 1, 1994.
Schroff designs, manufactures and markets cabinets, cases,
subracks and accessories for the electronics industry. The
company has approximately 1,400 employees with operations
in Germany, France, England, the United States, Japan,
Sweden, Finland, Italy and Taiwan. Schroff is the largest
manufacturer in Europe's electronic enclosure market and a
world technical leader. The company's 1993 sales were
approximately $160 million.
Pentair's Hoffman Engineering subsidiary is the leading North
American manufacturer of electrical enclosures and related
products. Schroff and Hoffman Engineering together will
represent leadership in the world-wide enclosure market. The
combination of electronic enclosures from Schroff and electrical
enclosures from Hoffman provides the most comprehensive
product offering in the world.
Pentair, Inc. is a St. Paul, Minnesota-based company with 1993
sales of $1.3 billion. The company comprises approximately
9,700 employees in 11 businesses which manufacture electrical
and electronics enclosures; woodworking equipment; power
tools; sporting ammunition; automotive service equipment;
industrial lubrication systems and material dispensing
equipment; pumps; and paper. Pentair common stock is
quoted on the NASDAQ National Market System under the
symbol: PNTA.
